Presentation prepared by Xinshen Diao, Paul Dorosh, Mia Ellis, Karl Pauw, and James Thurlow, all with the International Food Policy Research Institute, Washington, DC. This is part of the Global Crisis Country Series.

1. Version: 7 July 2022
Zambia
Impacts of the Ukraine and Global
Crisis on Food Systems and Poverty
Antony Chapoto, Xinshen Diao, Paul Dorosh, Mia Ellis, Karl Pauw, Mitelo Subakanya, James
Thurlow
Agricultural Policy Research and Outreach Institute (IAPRI), Zambia
International Food Policy Research Institute, Washington DC
These country studies are conducted by IFPRI with financial support from
BMGF, FCDO, and USAID. All studies use data and models developed with
ongoing support from BMGF, USAID and the CGIAR’s “Foresight and Metrics”
initiative. The Zambia case study benefits from working with Agricultural Policy
Research and Outreach Institute (IAPRI) in Zambia.
Antony Chapoto (antony.chapoto@iapri.org.zm) | Xinshen Diao (x.diao@cgiar.org) |
Paul Dorosh (p.dorosh@cgiar.org) | James Thurlow (j.thurlow@cgiar.org)

2. Version: 7 July 2022
Overview
• Series of country case studies
• Economywide modeling
• Capture world market shocks
• Estimate impacts on economy, agri-food
system, poverty, food security, etc.
• Simulate policy responses
• Three phases of analysis:
1. Initial data collection and impact assessment
2. Data revisions and analysis of broad policy options
• Cash transfers, food aid, and fertilizer subsidies
• Fiscal implications for national governments
3. In-country engagement and tailored policy analysis
Impact
assessment
Policy
analysis
Country coverage
Countries with IFPRI RIAPA models
May June
July

3. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations World Price Shocks
Source: World Bank Pink Sheets
Global data
11%
-13%
100%
56%
34%
88%
101%
Maize Rice Wheat Palm oil Crude oil Natural gas Fertilizer
Change in real world prices (June 2021 to April 2022)
30 Jun 2021 - 31 Jan 2022 31 Jan 2022 - 30 Apr 2022
30 Jun 2021 - 30 Apr 2022

4. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Supply and Demand
Supply
(% by source)
Demand
(% by use)
Zambia data
Source: IFPRI Zambia RIAPA Model
99%
73%
100%
25%
27%
75%
Maize Wheat Edible oils Oil products
Imports
Domestic
41%
72%
6%
77%
51%
27%
60%
22%
9%
34%
Maize Wheat Edible oils Oil products
Exports
Final use
Input use
+ Others = 100%
+ + +
1.3% 0.2% 0.2% 4.1%
Products’ share of the
value of total demand
throughout the economy

5. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Consumption Baskets
Zambia data
Source: IFPRI Zambia RIAPA Model
6.3%
10.6%
5.2%
12.9%
6.1%
38.1%
52.0%
36.3%
58.4%
38.7%
55.7%
46.6%
63.5%
40.4%
60.8%
All households Rural Urban Poor Nonpoor
Composition of household consumption spending
Cereals & edible oils Other foods Non-food goods & services

6. Version: 7 July 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations Fertilizer Adoption Rate
Source: Rural Agricultural Livelihood Survey 2019, IAPRI, Zambia
Timing When is the fertilizer needed?
73%
49%
38%
26%
8%
8%
0%
27%
12%
85%
77%
37%
37%
Maize
Sorghum & millet
Rice
Pulses
Groundnuts
Oilseeds
Cassava
Irish potatoes
Vegetables
Tobacco
Cotton
Fruits
Coffee
Share of cultivated land using fertilizer
Zambia data

7. Version: 7 July 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations
Crop Calendar
Source: FEWSNET Zambia
Timing When is the fertilizer needed?
Planting for Zambia’s 2022 main season is already
underway
Zambia

8. Version: 7 July 2022
Results | GDP and Employment
• National GDP and employment declines
• Negative terms-of-trade shock
(i.e., negative effect of higher import prices outweighs positive
effect of higher export prices)
• Rising import costs reduces spending on
domestically produced goods
• Falling production leads to job losses
• Impacts occur throughout the economy
• Agri-food system GDP and employment also fall
• GDP declines more in primary agriculture and less
so in off-farm agri-food sectors (e.g., processing,
trading)
• Larger job losses in off-farm within agri-food
system
• Rising prices increase cost of food processing and
food related services and lower demand for them
• More job losses outside of the agri-food system
• Mainly in labor intensive services
Source: IFPRI Zambia RIAPA Model
Contribution to total change
GDP
Jobs
-0.8%
-0.4%
-0.9%
-0.3%
-0.8%
-0.8%
-0.1%
0.1%
-2.0%
-1.8%
-2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Change in GDP and employment due to
food, fuel and fertilizer shocks (%)
GDP Employment
4%
93%
Agriculture
Off-farm
Outside AFS
17%
93%
Note: Model results are for 2022. Employment includes farmers, paid and non-paid workers, and self-employed persons.

9. Version: 7 July 2022
Results | Drivers of GDP Losses
• Fuel shocks cause the decline in national GDP
• Modestly negative impact of fertilizer shocks offset by a
small positive effect from rising food prices
• Agri-food GDP losses driven by fertilizer and food price
shocks
• Fertilizer shocks directly affect primary agricultural
production
• Disrupts downstream processing via supply chains
• Zambia exports maize and oil seeds, and agriculture
benefits from rising world prices for these commodities
• Larger GDP losses outside the agri-food system driven
more by higher fuel prices
• Higher transaction costs
• Lower consumer demand
Source: IFPRI Zambia RIAPA Model
-0.1%
0.2%
-0.2%
-0.8%
-0.3%
0.2%
-0.9%
-0.4%
-0.8%
-0.3%
-0.8%
-0.4%
-0.9%
-0.3%
-0.8%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Percentage change in real GDP due to food, fuel and
fertilizer shocks (%)
Food prices Fuel prices Fertilizer prices & response
Notes: About 20 percent of the effect on agriculture GDP under “fertilizer prices and response” is directly from rising fertilizer,
while the remaining 80 percent is from the productivity shock caused by lowering the use of fertilizer.

10. Version: 7 July 2022
Results | Household Consumption
Source: IFPRI’s Zambia RIAPA Model
• Household consumption falls significantly
• Larger than GDP losses as households are hit twice by rising
prices and falling incomes
• Importance of shocks differs across population groups:
• Fuel shocks affect all households and are more important for
urban and nonpoor households
• Earn more income outside the agri-food system
• More import-intensive consumer basket
• Consume products with larger transaction cost margins
• Led to larger consumption fall among urban households
• Fertilizer shocks important for rural and poor households
• Rely more on farm incomes that are negatively affected by
declines in agricultural production
• Consume more domestically-produced foods
• Food prices have some positive effects
• Positive income effect from increase in export crop production
offsets the negative effect of higher food prices for rural
households
• However, grains from rising food prices are offset by the reduces
in consumption led by higher fuel and fertilizer prices
0.6%
-0.1%
0.7%
-2.3%
-2.2%
-2.3%
-2.4%
-2.3%
-0.2%
-0.4%
-0.5%
-2.4%
-2.1%
-2.6%
-2.2%
-2.5%
National
Rural
Urban
Poor
Nonpoor
Percentage change in real consumption
Food prices Fuel prices Fertilizer prices & response

11. Version: 7 July 2022
Results | Changes in Inequality
• Differential effects on poor/nonpoor households drive
changes in inequality:
• Fuel shocks affect all households and cause relatively
larger consumption losses for households in the third
quintile
• Fertilizer shocks affect lowest quintile and have little effect
on the richer households in top quintile, causing inequality
to increase
• Food prices benefit poor households in the first three low
quintiles with little impact on the richer household
quintiles
• Most of them are rural households benefiting from increase
in crop production
• Overall, inequality is largely not affected
• But poverty still increased
Source: IFPRI Zambia RIAPA Model
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
Q1 Q2 Q3 Q4 Q5
Percentage change in quintile consumption
Food prices
Fuel prices
Fertilizer prices & response
Combined food, fuel and fertilizer shocks

12. Version: 7 July 2022
Share of population
falling into poverty
Results | Poverty
• Poverty rises
• Headcount rate up 0.9% points
• 160 thousand more people pushed into poverty
• Fuel shocks are the dominant factor for rising
poverty among urban households
• Larger increase in poverty in urban areas
• Two-third of expanded poor population
• Consume more energy intensive products and
services
• Rising food prices negatively affect urban poor
• Driven mainly by fuel shocks
Source: IFPRI Zambia RIAPA Model
-0.2%
0.1%
-0.3%
0.9%
1.2%
0.6%
0.1%
0.1%
0.2%
0.9%
1.3%
0.5%
National
Urban
Rural
Change in poverty headcount rate (%-point)
Food prices Fuel prices Fertilizer prices & response
158
94
65
25 159
106
53
National
Urban
Rural
Change in poor population (1000s)
Food prices Fuel prices Fertilizer prices & response
67%
33%
Urban
Rural

13. Version: 7 July 2022
• Food, fuel and fertilizer shocks together increase the
cost of a healthy reference diet
• Reference diet is the EAT-Lancet’s “healthy” diet
thresholds for the six major food groups
• Rising prices for edible oils (in added fats) push up the
real costs for many food groups, while falling incomes
reduce demand for vegetables and thus, lower their
costs slightly
Results | Diet Quality
Source: IFPRI Zambia RIAPA Model
• Rising food prices and falling incomes cause diet quality to
worsen for many households
• Prior to the crisis, few households had consumption levels and
diversity needed for a healthy diet
• Rising food prices become a dominant factor in diet quality
deteriorated; together with other two shocks, they cause 213
thousand people to become deprived in at least one additional
food group
• Urban households account for more of the deterioration in
diet quality
1.1%
0.2%
-0.1%
0.8%
Net change in
cost of healthy
diet
Contributions of
food groups to
change
Shares of six food groups in total cost
of a healthy diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
18.3%
8.3%
9.9%
24.4%
31.8%
7.3%
Shares of six food groups
in total cost of a healthy
diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
140
112
33
22
15
50
17
30
213
144
69
National
Urban
Rural
Number of people to become deprived in at least one
additional food group (1000s)
Food prices Fuel prices Fertilizer prices & response

14. Version: 7 July 2022
Headlines
• Food, fuel and fertilizer shocks lead to a reductions in GDP
and employment in Zambia
• Agri-food system adversely affected, alongside the broader
economy
• Agriculture is particularly at risk to fertilizer shocks, esp. if it
leads to lower fertilizer use in the current season
• Poor urban households are especially vulnerable
• Affected more by rising fuel prices in increase in poverty
• Affected more for diet quality deterioration by rising food
prices
• Next steps
• Evaluate policy options available to governments and
development partners to mitigate impacts on food systems,
poverty, and food insecurity (e.g., cash transfers, food aid,
fertilizer subsidies, fiscal support, etc.)
Impact
assessment
Policy
analysis
Country coverage
May June
July